Canadian real estate sales had a record July. July housing sales across the country were the best on record for the month and the largest year-over year increase in two years, the Canadian Real Estate Association said.

The Ottawa-based group, which represents about 100 boards across the country, said there were 50,270 units sold via the multiple listing service last month. That’s an 18.2% jump from a year ago. It also marked the first time sales had topped 50,000 in July.

“The difference in the resale housing market now, compared to the beginning of the year, is night and day and nowhere is this more evident than in the west,” said Dale Ripplinger, president of CREA. “Homebuyers recognize that interest rates and prices have bottomed out, and are taking advantage of excellent affordability before prices and interest rates move higher.”

A five-year fixed rate mortgage, the most popular product among consumers, is still available for under 4% at some financial institutions. Variable rate mortgages, tied to prime, remain in the 3% range and are not expected to rise until June. The Bank of Canada has pledged not to change its lending rate until then – but it is not an ironclad guarantee.

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The quarterly index gained nine points since March and now stands at 20, which is 15 points up from what it was in December, when it hit the lowest level in a decade.

Manulife calculates the index by subtracting the percentage of those who say they believe it is not a good or very good time to invest from those who feel the opposite.

Nine out of 10 investment categories were ahead in the poll taken in June, the company said.

Investment property had the largest jump, adding 18 points after a 23-point gain in March.

“Canadians seem more interested in real estate, equity and investment funds after a stretch of gloomy economic news since late last year,” Paul Rooney, president and CEO of Manulife Canada, said in a news release.

Equities gained 13 points to –8, the only category among the 10 still in negative territory.

Along with the confidence in investing, the respondents also said they expect they will be as well or better off six months from now.

About a third said they thought they would be better off, just over half said they would be the same and just one is seven said they would be worse off.

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When it comes to the housing market, E-town still rules.

That’s the word from Don Campbell, president of Canada’s Real Estate Investment Network.

The popular author, consultant and public speaker says Edmonton remains the best place on the continent to invest in residential real estate. It’s a claim he first made last August, shortly after oil prices peaked at$147 US a barrel, and Alberta was rolling in energy riches.

Despite a sharp drop-off in oil and gas prices since, and a big slowdown in new oilsands projects, Campbell hasn’t flinched. He insists Edmonton will emerge from the recession stronger than ever.

“According to our research, Edmonton is still the No. 1 place for long-term investing in real estate in North America, absolutely,” says Campbell.

“Edmonton has the potential, it has the job growth. We know that when the recovery comes–and it will come, we just don’t know when –Edmonton is going to be able to provide fuel and fertilizer, which is exactly what the world is looking for. So that’s a pretty good basis for job growth.”

When Campbell speaks, others tend to listen.

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Construction of new homes has surged by a surprising eight per cent in June, prompting analysts to say the housing market in Canada has turned the corner and begun recovering.

The annual pace of housing starts rose to 140,700 units in June from 130,300 in May, with the increase in activity spread across different types of buildings, said the national housing agency, Canada Mortgage and Housing Corp.

“The increase in housing starts in June is broadly based, encompassing both the singles and multiples segments,” said Bob Dugan, chief economist at CHMC. “In addition, Western Canada experienced an increase this month.”

The leap in activity was much stronger than anticipated. Analysts had been expecting a small increase, after seeing decreases in nine of the previous 12 months.

While home construction is still 30 per cent less active than a year ago, there are many signs that the bottom has been reached and the housing market has moved on to a slow recovery, said Dawn Desjardins, assistant chief economist at Royal Bank of Canada.

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The worst of Canada’s housing market woes appear to be past but the sector’s rebound will be tenuous as a rise in mortgage rates and high unemployment limit the recovery in prices and sales.

Property experts say first-time buyers and Bank of Canada rate cuts have helped restore stability to a market that slumped from late 2008 to early this year, when the worst leg of the global financial crisis battered consumer confidence.

“We should be less fearful than we were six months ago, but I don’t think we should be exuberant yet. The resale markets in Canada are very strong. May numbers were pretty good, and June numbers will be even better,” said Will Dunning, an economic consultant who specializes in the housing market.

“But by July and into the fall there will be an offset of considerably slower activity. I don’t think it’s likely to go off a cliff. It’ll depend on what happens in employment and the broader economy, and how that affects confidence.”

Recent data suggest Canada’s residential property market, which weathered the financial crisis much better than its hard-hit U.S. counterpart, has been thawing for several months.

The latest Canadian Real Estate Association data shows May resale home prices rose 0.4 per cent to $319,757, topping the previous record set a year earlier. It was the first year-over-year increase since May last year. And sales activity climbed for a fourth straight month.

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The Canadian housing market is beginning to look like a large jumbled puzzle. A week after a report showed the price of an average house had soared to a record high, an alternate report suggested Wednesday prices have in fact declined for five consecutive months.

Both sources are respectable, and their data accurate. But different methodology has led to a discrepancy between the figures. So where does the Canadian housing market stand?

Economists and those in the real estate industry believe conditions fall somewhere in the middle.

The price of a Canadian home was down 6.7% in April from a year earlier, the relatively new Teranet–National Bank House Price Index showed Wednesday. It was the fifth consecutive month of yearly decrease and caused the index to be down 8.9% from its peak in August. Home prices in Vancouver were down 10.9% from April last year, while prices dropped 9.8% in Calgary and 7.6% in Toronto. On a positive note, prices were up 2.4% in Montreal, 0.6% in Ottawa and 0.2% in Halifax.

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The new-condo market may be just starting to warm up again but the resale market is hot. Units in highly sought after areas are drawing multiple offers and selling quickly.

The new-condo market may be just starting to warm up again but the resale market is hot, according to May statistics from the Toronto Real Estate Board (TREB). In fact, condo resales, at 2,081 units in May, were up about 2 per cent from the same month a year earlier.

Condo resales are again moving in lockstep with single family homes and townhouses.

In May, total Multiple Listings Service (MLS) condo sales were 4,561 units in the Greater Toronto Area, compared with 4,422 in May last year – a 2 per cent increase.

The average selling price for all MLS sales (including both houses and condos) was $399,811, down a touch from $400,817 last year.

While condo resales were up, listings were down, says Jason Mercer, senior manager of market analysis at TREB. The upshot is that more buyers than sellers means resale condos are moving with great speed – often as little as a week on the market – and the best ones are drawing multiple offers.“Sellers here in Mississauga are getting between 85 per cent and 105 per cent of the listing price,” says Debbie Cosic of Sutton Group Signature Realty Inc. of Mississauga. “In highly sought after areas like Lorne Park just north of Lakeshore Road and Mineola, near Highway 10 and the Queen Elizabeth, you will see three or four offers and suites moving within a week, often at more than the asking price.

“Calls to our office are up 60 per cent from March and showings of properties are up about 60 per cent as well.”

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Mortgage rates in Canada, which have plunged by almost 50% in the last year, aren’t likely to fall further, said Phil Soper, chief executive of Brookfield Real Estate Services Fund.

“Certainly with the Bank of Canada’s target rate set at virtually zero, there’s very little room,” Mr. Soper said Tuesday at a conference in Toronto on Canada’s real estate market. The rate is “the lowest it’s been in anyone in this room’s lifetime.”

Rates for home loans have been dropping during the biggest financial crisis since the Great Depression, with some lenders offering mortgages approaching 4%, Mr. Soper said. That compares with an average posted five-year rate of 7.5% a year ago, according to the Bank of Canada. He added that home prices in Canada aren’t likely to rise “sharply” over the next two years.

Bank of Montreal, which sponsored the conference, lowered its rate for a five-year fixed-rate mortgage this month to 4.15%.

“We are approaching almost zero interest rates,” at the Bank of Canada, said John Turner, the Toronto-based bank’s director of mortgages. “The question becomes, how much upward pressure will there be as we come out of this recession?”

The Bank of Canada last month cut its benchmark lending rate to 0.5%, its lowest ever, and said it’s preparing to use policies beyond interest rate moves to revive an economy hit by a recession and tight credit markets. The next rate announcement is April 21.

Canadian existing home sales rose in February for the first time since September as buyers took advantage of lower mortgage rates and prices, according to the Canadian Real Estate Association’s Multiple Listing Service. Sales of existing homes rose 8.6% from January to 28,669 units.

The real estate company’s annual market outlook was heavy on comparisons to the crash that occurred last decade.

“Whatever this is folks, it is not the early 90s,” John O’Bryan, vice-chairman of CB Richard Ellis, told an audience of 1,300 real estate professionals. “Not only was the development industry operating at warp speed but we were literally heading where no man had been before.”

Last decade developers were getting 7% yields but were borrowing at 11% — a crash was inevitable.

“What’s different today. Well, almost everything,” said Mr. O’Bryan.

For starters, he pointed out, interest rates are much lower. But there is also less supply of office space coming on stream with the exceptions of the downtown areas of Toronto and Calgary and suburban Ottawa.

“In a nutshell, in the early 90s we had highly leveraged, very aggressive developers with large inventories, a pipeline full of development projects and compliant lenders, all fuelled by negative yields and a mountain of debt,” said Mr. O’Bryan. “Today, by contrast, [there are] conservatively managed funds with balance sheets, low

leverage and little or no land holdings.”

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